Intellectual Property Law

SAN FRANCISCO -- RealNetworks told a federal judge on Monday it didn't think it would be sued by the Motion Picture Association of America for marketing DVD copying software.

Seattle-based RealNetworks made the argument in federal court here as part its defense against allegations it purposely trashed evidence in a copyright lawsuit brought by the MPAA in September. The suit claims RealNetworks' RealDVD software is illegal and allows users to circumvent technology designed to prevent the copying of DVDs.

RealNetworks made its surprising claim Monday because, under rules of evidence, companies must retain records if they believe they are going to be sued. The MPAA claims RealNetworks destroyed a host of documents relating to RealDVD's production -- well before the MPAA sued it in September.

"We didn't think litigation was probable," Leo Cunningham, a RealNetworks attorney, told U.S. District Judge Marilyn Hall Patel during a brief hearing.

The MPAA, however, usually sues any and all companies and individuals connected to what it perceives as a threat to the DVD.

Its litigation tactics have defeated every BitTorrent tracker in the United States. Its sister group, the Motion Picture Association, helped the Swedish authorities bring criminal charges against four founders of The Pirate Bay.

In the RealNetworks litigation, the studios allege in heavily redacted court documents that RealNetworks trashed a senior project manager's "engineering notebooks," an archive containing "actual code files" and other documents, one of which might reveal "Real's products are based in part on the work of ? hackers."

Regarding the notebooks, their disappearance is "a mystery," Cunningham told the judge during the brief hearing. He neither confirmed nor denied whether any other documentation was destroyed.

Bart Williams, an MPAA attorney, told Patel that it was obvious the MPAA would sue RealNetworks. He said RealNetworks should have known as such, even from the time of the product's initial development two years ago.

"This was not some theoretically possibility," Williams said. He also said, "They knew there would be a lawsuit."

Patel did not hint at whether she would find RealNetworks violated rules requiring the retention of documents.

The MPAA, which is known for its heavy hand at litigation, is seeking unspecified monetary sanctions and other penalties from RealNetworks as part of its lawsuit against the DVD copying software. A hearing on the lawsuit's merits is scheduled for next month.

After days on the market and 3,000 copies of RealDVD sold, Patel blocked its distribution in October pending the outcome of the ongoing litigation. The MPAA alleges the product violates the Digital Millennium Copyright Act because it circumvents the content-scramble system license granted to RealNetworks by the DVD Copy Control Association.

The Seattle company said its software does not circumvent encryption software in violation of the DMCA. The software allows users to store copies of movies on their hard drives, which the company says is a fair use allowed under the DMCA.

A central dispute in the case concerns whether it is an circumvention violation for RealDVD to copy the DVD encryption into a computer hard drive that allows playback of the movie at any time absent the original disc. The MPAA says the content-scramble license requires that the keys to the encryption code must be read from the DVD while the DVD is inside the computer.

Photo: john_a_ward

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